West Chester schools: No tax hikes above Act 1 index

WESTTOWN – The West Chester Area School Board took one of the first steps in preparing the district’s 2013-2014 fiscal budget by passing a resolution stating the board will not raise taxes above the Act 1 index rate or seek referendum exceptions.

In June 2006, the Pennsylvania Legislature passed Act 1 of Special Session 2006 titled “Taxpayer Relief Act.” Act 1 requires school districts to limit tax increases to the level set by an inflation index unless the tax increase is approved by voters in a referendum. The district may also choose to seek certain referendum exceptions that would allow the district to increase taxes by more than the index rate.

The Act 1 index for the 2013-2014 fiscal year is set at 1.7 percent.

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The board passed the resolution in order to bypass certain preliminary budget requirements set by the state. The resolution was passed by a unanimous vote at Monday’s monthly board meeting at G. A. Stetson Middle School. The resolution was also approved unanimously by the district property and finance committee that met before the board meeting.

“What it does is allows us to bypass all the red tape that normally goes along with preparing a budget under the Act 1 requirements so it allows us to delay our budget adoptions, initial proposed budget, until April,” said Suzanne Moore, director of business affairs for the district at Monday’s property and finance committee. “We will have a lot more information at that time. It makes a lot better sense when preparing a budget to wait until we have more information like the governor’s budget in our preparation of the proposed budget.”

By passing the resolution, the board will not be eligible to seek referendum exceptions and is not able to request approval from voters through a referendum to increase a tax rate by more than the index.

Before the vote, district teacher Bob Marks spoke against the resolution, citing the benefits the exception could give the district if needed.

“I do believe this is a mistake because you do not know what the governor is going to do with any cuts or possible increases,” Marks said. “Even if you kept the option open to exceptions you can still decide later on that you don’t want to take them.”

If the district had pursued the exceptions, it would have brought an additional $2.5 million in tax revenue for the 2013-2014 year. If the board chooses to increase taxes up to the 1.7 percent Act 1 index rate, an additional $3.4 million would be raised.

The district budget calendar anticipates the adoption of a final 2013-2014 budget at the May 28 board meeting.